Green Productivity

CHAPTER CHAPTER 1 1
Sustainable Development & Green Productivity

S.No. Contents
Objective of the Lecture
Page No.
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Lecture Specific Instructions to Resource Persons L1/3 1.1 1.1.1 1.1.2 1.1.3 1.1.4 1.1.5 1.1.6 1.1.7 1.2 1.2.1 1.2.2 1.2.3 1.2.4 1.2.5 1.2.6 1.2.7 1.2.8 1.2.9 1.3 1.3.1 1.3.2 1.3.3 1.3.4 1.3.5 1.3.6 1.4 1.4.1 1.4.2 1.4.3 1.4.4 1.4.5 1.4.6 Economic and Environmental Trends Economic Activity and Environment Production Patterns Consumption Patterns Industry and Environmental Degradation Trade and Environment Trade and Developing Countries Importance of SMEs L1/4 - L1/10
Global Environmental Concerns L1/11 - L1/21 Environmental Issues from the 1960s Landmark Milestones from 1960s Global Environmental Issues Regional Scenario Regional Scenario Pollution Regional Scenario Environmental Degradation Regional Scenario Resource Depletion Regional Scenario Biodiversity Cost of Environmental Damage Response to Environmental Concerns Public Concern International Environmental Treaties and Conventions Sustainable Development and Agenda 21 Response to Agenda 21 Corporate Response Eco Efficiency, Factor 4 and 10 Environmental Management Trends Environmental Management Trends Pollution Prevention and Source Reduction Beyond Pollution Prevention Resource Efficiency and Sustainability Productivity Practices From Productivity to Green Productivity Learnings from the Lecture Bibliography L1/22 - L1/28
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Asian Productivity Organization, Tokyo
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Objective Objective of of the the Lecture Lecture
The objective of this lecture is to provide background to the evolution of the concept of Green Productivity (GP) from productivity practices. The lecture begins with background on the existing state of the environment and development, and builds towards the need for a strategy that can move the Asian region towards sustainable development. The lecture is aimed at both small and medium-sized enterprises (SMEs), as well as policymakers. By examining trends in present environmental management strategies and practices, the lecture describes the need for the emergence of Green Productivity (GP). The lecture also presents the driving forces behind GP and the benefits that GP provides to business, the environment and society at large. It is also the aim of this lecture to show that GP is not just a onedimensional strategy addressing only specific sectors, such as industry. GP is a multi-dimensional, holistic strategy that aims at improving overall quality of life while leading development in a sustainable direction.
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Lecture Specific Instruction to the Resource Persons

This lecture aims to provide background to the evolution of Green Productivity as a concept. The duration of this lecture is 60 minutes, with 40 minutes reserved for the presentation and 20 minutes for discussion. Bearing in mind that the lecture aims to convince the participants of the need for GP, the suggested allotment of time for the various topics to be covered is as follows: 1. Economic and Environmental Trends 2. Global Environmental Concerns 3. Response to Environmental Concerns 4. Environmental Management Trends 5 minutes 15 minutes 5 minutes 15 minutes
The last 20 minutes must be reserved for discussion, so that the participants can clarify the issues that concern them. The lecture must be in a narrative form, tracing the history of GP. In section 1.1 and 1.2 of this lecture, the resource persons may wish to use some location-specific information to illustrate the need for GP in the area where it is being promoted. The resource person may use his or her discretion in selecting the viewgraphs provided for this lecture if additional ones on local issues are to be added. Care should be taken to maintain the correct time allotment for the section. Section 1.4 is the heart of the presentation and is to be used to convince the participants of the need for GP.
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1.1 1.1 Economic Economic & & Environmental Environmental Trends Trends
1.1.1 Economic Activity & Environment
Economic Activity and Environment

ECONOMIC ACTIVITY ENVIRONMENT
Natural resources drawn from the environment
Impact of resource extraction, use and disposal Drives Drives
Environment and development are not separate challenges; they are inexorably linked. Development cannot subsist upon a deteriorating environmental resource base; the environment cannot be protected when growth leaves out of account the costs of environmental destruction. They are linked in a complex system of cause and effect. Our Common Future, The World Commission on Environment and Development, 1987
Production Patterns
Consumption Patterns Trade
Any form of economic activity, be it agriculture, industry or, more recently, the services sector, involves use of natural resources. These resources could be water, energy, mineral or biological. Essential human needs can be met only through goods and services provided by the utilization of these resources. The process of harnessing these resources to provide useful goods and services, however, also results in degradation of the environment. Resource consumption in the world is increasing rapidly, driven by population growth and rising wealth. Technological change and urbanization also fuel consumption, by creating new patterns of human needs and aspirations. Modern consumption patterns and the corresponding production patterns involved in the satisfying of human needs are leading to high fossil fuel and mineral resource use and excessive water consumption, leading to polluting emissions, volumes of waste and degradation of natural systems. It is now universally recognized that production and consumption patterns have become unsustainable. This has led to severe, and in many cases, irreversible deterioration of the environment. To protect the environment, long-term structural change in economic activity is required. It has to be made more responsible and resource utilization needs to be made more efficient. Production and consumption patterns are indeed skewed by trade and competition in international trade. Before we can develop sustainable approaches and strategies, we need to examine the present situation .
The bottom line here is: The rate at which resources are extracted/ impacted must be slower that the rate at which they are replenished by natural processes. This is the core or the essence of sustainable development.
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1.1.2 Production Patterns
Production Patterns
Some facts about Asian economic growth
Production
1. World Development Indicators, The World Bank, 1998 2. Cylke O, Asia,The Environment and the Future of Development in: An Asian Clean Revolution - US-AEP (Background Papers, July 1998)
Average Average annual annual growth growth between between 1990 1990 to 1996, for East Asia and the to 1996, for East Asia and the Pacific, Pacific, has has been been14.5%. 14.5%. Agriculture z Industry in East Asia has increased its z Industry in East Asia has increased its share shareof of total total output output from from 32% 32%to to 45% 45% and and in South Asia from 21% to 28% between in South Asia from 21% to 28% between 1965 1965to to1996. 1996. z In South z In South Asia Asiathe thevalue valueadded added(as (asa a% %of of GDP) by agriculture has fallen from 38% GDP) by agriculture has fallen from 38% Industry in in 1980 1980 to to 28% 28% in in 1996 1996 while while industrial industrial output has increased from 25% output has increased from 25% to to 28% 28% in in the same period. the same period. z z Exports Exports of of services services from from developing developing countries grew at an average countries grew at an average annual annual rate rate of of 12% 12% in in the the 1990s, 1990s, twice twice as as fast fast as as Services those thosefrom fromindustrial industrialregions. regions.
z z
Production activities that provide essential goods and services for consumption include industry, agriculture and services. Industry is central to the economies of modern societies and an indispensable vehicle of growth. It is essential that developing countries widen their development base and meet growing needs. Industry has an impact on the natural resource base throughout the entire cycle, from raw material exploration and extraction to product use and disposal. These impacts may be positive, enhancing the quality of a resource or extending its uses. They may also be negative as a result of pollution and depletion/degradation of resources, both during the manufacture of goods and services as well as during their use and disposal.
Pollution is a form of a waste and a symptom of inefficiency in industrial production
In Asia, intensive growth is resulting in heavier pollution loads, both in the short- and medium term. Pollution intensive, resource-based industries such as metal products, chemicals, machinery and equipment are growing very fast in Asias developing countries. This has resulted in extensive environmental degradation and depletion of natural resources. Compounding the problems of industrial development, recent changes in agriculturea mainstay of economic development in a number of Asian countries is also leading to natural resource degradation. New hybrid varieties of seeds are being used for high-yield crops, resulting in increased use of agro-chemicals in the form of pesticides and fertilizers. The growth of the services sector in East Asia and the Pacific was three times the world average in the 1990s. In fact, exports of services from developing countries grew at an average annual rate of 12% in the 1990s, twice as fast as industrial regions. Increasing awareness and growing public concern about the negative impacts of agriculture, industry and services on natural resources is forcing a rethinking of the strategy for growth and economic development. Industry, however, still has the greatest impact on production and consumption patterns. L1 / 5
1.1.3 Consumption Patterns
Consumption Pattern
Consumers boycotts of products based on environmentally and socially damaging practices include e.g., use of tropical timber, textiles produced under unsafe / exploitative social conditions, metal finishing done with toxic metals. Boycotts against products of oil companies causing damage to eco-sensitive areas and indigenous people have also been intensive. Important trends are emerging among consumers in North America, Europe and Japan. Over 80% of Americans are concerned about the environmental and social consequences of a materialistic society. The Government of Japan launched the ECO ASIA initiative, to draw up a long term perspective for sustainable development for the Asia-Pacific region upto 2025. This found a common Asia-Pacific eco-consciousness. Green consumer movement has waned since the late 1980s in Europe. Between 1992-1995 willingness to buy eco-friendly products has fallen from 69-58% in Britain and 75-50% in Germany. Main reason is confusion due to proliferation of labels and false claims. Active demand still exists however in some areas such as organic produce, fair trade coffee, tea and bananas, organic cotton.
A knowledgeable consumer drives producers to be more responsible. Accountability and communication will thus play a major role in driving development towards a sustainable path. This is where the role of responsible NGOs and pressure groups is critical.
Green consumerism began in Europe. It reached its peak in the 1980s, and was particularly strong in Germany. Prominent consumer boycotts include that of Shell Oil in protest at environmental and social degradation in Nigeria; and an eight-year boycott against Mitsubishi Motor Sales of America and Mitsubishi Electric America for the use of tropical timber in paper, packaging and products. Studies undertaken as early as 1985 showed that demand by consumers for eco-friendly products was 37.6%, a two-fold increase over 1977 figures. Consumers are also beginning to favor manufacturers who take responsibility for disposal of products such as fridges, computers, batteries and cars. Recent Eurobarometer surveys report that as a result of a proliferation of labels and false claims of eco-friendliness, there is a decline in the willingness of consumers to pay a premium for eco-friendly goods and services unless categorically proven.
1. Report of the workshop on Consumption in a Sustainable World held in Kabelvag, Norway, Ministry of Environment, Norway, June 1998. 2. Robins N., Roberts., S. Changing Consumption and Production Patterns, Unlocking Trade Opportunities, IIED, UK, 1997.
Japan's rapid transition to consumer affluence makes it a role model for emerging economies in Asia that are shifting to sustainable consumption. Responding to this, the ECO ASIA initiative was launched by the Japanese government to draw up a long-term perspective for sustainable development in the Asia-Pacific region up to 2025. The stress here is on values and traditional frugal Asian lifestyles, which are being threatened by mass consumption. Nevertheless, surveys have shown that patterns of consumption in the region are generally more energy efficient, with more equitable and less excessive consumption than in Europe and America. Green consumerism is thus forcing producers to recognize environment as a competitive advantage and it is also indicating that producers must ensure that their claims are verifiable and authentic.
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1.1.4 Industry and Environmental Degradation
Industry and Environmental Degradation

Resource extraction of raw materials through mining, logging, water extraction, energy generation. Resource utilization during manufacture leading to emissions, wastewater and solid waste generation. Resource demand during distribution, use and disposal of goods and services. ENVIRONMENTAL IMPACT
Costs of environmental damage Industry impacts the environment at every stage of the life cycle of goods and services produced. These effects begin at the stage of raw material exploration and extraction, continue in the transformation into products, and end in the use and disposal of products by consumers. Obtaining raw materials through mining and other extractive processes leads to degradation of soil, vegetation, and contamination of air and water bodies. Manufacturing processes result in air emissions, wastewater and solid waste generation, leading to pollution of air, water, land and associated biota. Distribution of goods and services demands resources, including energy and packaging material, resulting in secondary environmental impacts. Ramankutty, R., Brandon, C. Asia and the Pacific, Asia Region Technical Department's Environment and Natural Resource Division (ASTEN), World Bank, 1999. http://wwwesd.worldbank.org/envmat/ vol2f96/ asiapac.htm Finally, the use and disposal of products by consumers again results in pollution of air, water and land. In the 1950s and early 1960s, negative impacts of industrial activity were perceived to be local, but with the increasing expansion of industry and the globalization of trade, the footprint of environmental problems has crossed national and regional boundaries. All this environmental damage is happening at a large cost, even in simple economic terms. The costs of environmental degradation in Asian countries such as India are above 5% of annual GDP, and for China may be as high as 10%. The World Bank estimated in 1992 that East Asian countries would spend up to US$20 billion a year during the 1990s to clean up environmental damage brought about by rapid industrialization and population growth
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1.1.5 International Trade
Trade and Environment

Trade is becoming increasingly globalized as well as liberalized. International trade liberalization has been crucial for the success of Asian economies. Trade expansion has led to rapid growth in export-oriented industries, urbanization, construction boom. Patterns of international trade have changed markedly. Focus of trade from the Asian region has been primarily on resource-intensive and labor intensive goods to the North. Such growth has had wide ranging benefits, improved living standards, provided technological capabilities and financial resources. However, this outward-looking export based growth has in the aggregate generated new and increased environmental pressures. From an economic perspective, both trade liberalization and environmental protection are inherently important. There is a need is to combine both these aspects to promote sustainable economic development.
Over 6.5% of OECD consumption was met by imports from developing countries in 1996 although this is expected to increase to 14% over the next decade. The implications of this trend for developing country exporters could be profound.
Trade has made nations economically and ecologically more interdependent. In the 1980s, value of trade in manufactured goods grew at a faster rate than that in primary products, with a growing number of developing countries emerging as major exporters of such goods. Industrialized market economies became more dependent on fuel and mineral imports from developing countries. Developing countries had to use non-renewable raw materials to earn foreign exchange. The dilemma was how to break foreign exchange constraints on growth while also minimizing damage to the environmental resource base supporting this growth. Today, a number of developing countries have diversified into manufactured exports. Trade liberalization has led to Indonesia, Thailand, and Malaysia achieving remarkable growth rates in exports, manufacturing output, and aggregate income. Most striking are the high growth rates achieved in China, by far the largest East Asian developing country. Outward-looking strategies, especially in the Asian region, have dramatically reduced poverty and raised living standards for a large fraction of the world's population. The flip side is that this trade-led growth has not been supported by corresponding policy changes. As a result, there has been extensive degradation of the environment and natural resources. Conditions for export success are changing as producers face rising environmental expectations in key export markets due to tightening of regulations, new corporate practices and changes in consumer values and lifestyles. The export-led growth has also provided Asia with the financial resources, technological capabilities, and institutions with which environmental problems can be managed. By raising living standards and strengthening communications, it has also created social and political conditions in which people demand environmental improvements. The crucial issue, however, is to establish supportive policies and promote strategies that ensure sustainability of trade and the environment.
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The challenge for developing countries is to open up new trade opportunities by stimulating trade in sustainable goods and services. As much as one-third of the value of manufactured exports is in the sectors where environmental requirements are emerging.
Our Common Future, The World Commission on Environment and Development, 1987.
1.1.6 International Trade & Developing Countries
Trade and Developing Countries

One of the most important events in international trade is the completion of negotiations of the Uruguay Round in 1993. Implications for developing countries are strong given that: (I) gains of US$ 230 billion per annum are likely to accrue to world economy. Of this less than 30% gains will accrue to the South i.e., the developing countries; (II) possible economic losses to developing countries importing food because of decreases in allowable European and North American agricultural subsidies. (III) Multifibre Agreement will be phased out in 2004 thus removing quotas on exports of textiles and clothing which would be favorable for a number of developing countries. Trade restrictions, protectionist barriers, non - tariff trade barriers such as ecolabels have environmental and economic implications for developing countries and sustainable trade .
Vaughan Scott, Trade and Environment: Perspectives of Developing Countries UNEP, Environment and Trade
In this context, the need to strengthen policy compatibility between trade liberalization and environmental protection has never been more crucial particularly for developing countries. This alone will ensure their survival in international trade. Role of WTO will be crucial in integrating trade and its environmental implications and in promoting and simulating trade in sustainable goods and services
The completion of the negotiations of the Uruguay Round of December 1993 is having far reaching implications on international trade for both developed and developing countries. The Uruguay Round has set the course for further liberalization of trade and is widely regarded as reinforcing a transparent, predictable, multilateral trading system, benefiting developed and developing countries alike. The implications of these negotiations need to be assessed in the face of issues influencing international trade, such as policy distortions in importing countries. Ihese range from protectionist barriers (especially for agricultural and textile imports) to bureaucratic regulations which effectively discriminate against foreign producers. Market access is a subject of much dispute for developing countries. In particular, they are seeking to clarify rules governing exports of agricultural, tropical, wood and fishery products, as well as textiles and electronics. The central issue is to find a workable balance between the sovereign right of countries to exploit their own environmental resources for economic gain, and the necessity of increased international cooperation to tackle mounting problems of resource and ecological degradation. It is not surprising, therefore, that an important challenge identified at the Earth Summit in 1992 was to ensure that trade and environment are mutually supportive." Having looked at the interdependent relationship between economic activity and the environment, there is a need at this point to trace the changing perceptions of environmental issues to society. Asian Productivity Organization, Tokyo
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1.1.7 Importance of SMEs
Importance of SMEs
A SME enterprise employ less than 100 people and has capital less than US $ 1,00,000 SMEs makeup 90% of number of enterprises in Asia Account for more than 50% of the Total Industrial Sector output in India and China and 10 to 25% in most other Asian countries Provide employment to about 50% workforce Contribute 50% of GDP Provide about 35% exports
PRO S Im p o rta n t S o u rce o f E m p lo y m e n t f o r lo w w a g e ea rn e rs F l e x i b le , R e a c t q u i c k ly t o n eed s an d d em an d T a le n t f o r i n n o v a t i o n CONS P o s e d i f f i c u lt p o l lu t i o n a b a t e m e n t p r o b le m s S p e c i f i c p o l lu t i o n p e r u n i t o f p r o d u c t g r e a t e r t h a n la r g e s c a le u n i t s L im ite d te c h n ic a l a n d F in a n c ia l r e so u rc e s a t th e ir d isp o sa l
The importance and dynamism of SMEs is one of the distinguishing features of the industrial sector in Asia. They are an important source of employment for low income earners, and by helping to alleviate poverty, serve an important political, as well as economic, function. SMEs are flexible, react quickly to needs and demands, and show talent for innovation. Also, in India and parts of China that are undergoing fundamental industrial sector reforms, SMEs are the most dynamic industrial sub-sector. SMEs account for more than 50% of the total industrial sector output in China and India, and for 10%- 25% in most other Asian countries. They make up over 90% of the number of enterprises in Asia; employ over half the workforce; contribute about half the GDP; and provide about 35% of exports. Most of the SMEs in the region employ less than 100 people, with capital of less than US$1 million. SMEs in Asia play a crucial role in the production-consumption cycle. Their presence and contribution is becoming increasingly significant in the trade-environment and supply chain linkages. SMEs pose difficult pollution abatement problems. They are not the major polluters in most sub-sectors, but they often pollute more per unit of output than large firms operating in the same sector. They have limited resources at their disposal (both technical and financial) and often find themselves unable to afford the changes necessary to meet environmental regulations and product controls.
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1.2 1.2 Global Global Environmental Environmental Concerns Concerns

1.2.1 Issues from the 1960s
Environmental Issues from 1960s

1970s - Industrial production was rapidly rising with a 7% annual growth in manufacturing. Negative environmental impacts of this boom were perceived as localized problems of air, water and land pollution. 1980s - Increasing global population; consumption patterns became more resource demanding; environmental problems transcended local and regional boundaries; recognition of regional and global impacts of development; acid rain, global warming, ozone layer depletion being recognized as serious issues; trade increased with dependence of developed economies for non-renewable resources on developing economies. 1990s - Sustainable development, environmental and social soundness began to be recognized as issues of governance. Role of environment and development in international trade have become issues of international polity and diplomacy. Emergence of a New Order with sustainable development as the need of the hour.
The late 1960s and early 1970s witnessed the public recognition of environmental issues in the West. However, environmental problems such as toxic waste contamination, air pollution and water pollution were perceived as local problems. In the 1980s, the fallout of industrial growth began to be reflected in transnational, regional-level problems. Examples include acid rain in Canada originating from industrial emissions in the US; forest destruction in Germany; and acidification of water bodies in Scandinavia. Developed countries began to increasingly depend on developing countries for renewable resources (fuel and mineral). This trade boosted growth of developing economies but led to degradation of natural resources. Hence, the impact of environmental degradation began crossing local and regional boundaries on the back of trade. Increased industrialization and energy consumption led to regional problems in the developing economies. Global warming and ozone layer depletion became issues of international concern. Trade was liberalized and globalized, leading to a greater recognition that environmental degradation does not respect boundaries. The 1990s saw the emergence of all these issues at international gatherings, and sustainable development has necessarily become the need of the hour. Environmental issues which were being discussed at technical seminars and debates have now become diplomatic issues and an integral part of international trade. The need to make production and consumption patterns sustainable has therefore become a political and diplomatic issue influencing business and environment.
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Origin of the concept of Limits of Growth
The Population Bomb Theory by Ehrlich & Ehrlich
United Nations Conferences on Environment, Population, Human Settlements

Rachel Carsons book Silent Spring
Landmark Milestones
The Global 2000 Report 1980
WCEDs Report Our Common Future
1.2.2
Landmark Milestones
Earth Summit at Rio and the Agenda 21
1960s
1970s
1980s
1990s
The environmental trends discussed earlier can be mapped to certain landmark activities which show that there has been a recognition of non-sustainability of development over the years starting from the 1960s. This occurred intermittently in the 1960s and 1970s but today the need for sustainable development has become the agenda for the new millenium. Some of the activities that eventually led to an increase in the publics awareness of the non-sustainability of development are: Rachel Carsons book Silent Spring that explicitly addressed the dangers of using pesticides. The creation of the concept of limits of growth that addresses issues of population vis--vis the finiteness of resources and pollution caused by overexploitation of these resources. The Population Bomb Theory by Ehrlich & Ehrlich that addresses the links between population and environment. The Global 2000 Report 1980 which presented the global state of environment. Agenda 21, United Nations Conference on Environment and Development, 1992 The World Council of Environment and Developments (WCED) 1987 report called Our Common Future, which for the first time provided a formal definition for sustainable development. Warning on environmental degradation and non-sustainability sounded by 1,670 scientists and 107 Noble Laureates on environmental degradation and non-sustainability of current development trends in 1992. Formation of the International Factor 10 Club.
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International Factor 10 Club

1.2.3 Global Scenario
Global Environmental Issues

Population ( Megacities
8 million ) in billion)
2.5 2.0 1980 19 1300 100 1.6 1950
3.8 9.0 2450 58 2600 85 4.9 1.4 1972
5.8 25.0 2770 91 4200 70 7.0 3.0 1997
( population
* Food
in million tons) in cubic km.)
Fisheries ( Water Use (
# Rainforest cover
tons of carbon)
CO 2 emissions ( Ozone Layer (
in billion conc . of
World Resource Institute http://www.wri.org
CFCs in parts per billion)
Environmental treaties and conventions have brought to light the issues which have to be confronted and managed. Some of the critical issues are examined in this section at the global level, and in greater detail at the regional (Asia) level. The various global environmental issues of concern are: Loss of crops and grazing land due to erosion, desertification, conversion of land to non-farm uses etc., currently totaling about 20 million hectares a year. Depletion of the world's tropical forests, leading to loss of resources, soil erosion, flooding, and loss of biodiversity - currently at a rate of 10 million hectares a year. The bottom line is that the human species is living more off the planets capital and less off its interest. This is bad business. Changing Course Stephan Schmidheiny with BCSD, MIT Press, England, 1992 Extinction of species, primarily from the global loss of habitat, and the associated loss of genetic diversity. Over 1000 plants and animal species are becoming extinct every year. Rapid population growth. Shortage of fresh water resources due to overexploitation of surface and groundwater resources. Over-fishing, habitat destruction, and pollution in the marine environment. Twenty- five of the world's most valuable fisheries are already seriously depleted due to over-fishing. Threats to human health from mismanagement of pesticides and hazardous substances, and from water-borne pathogens. Climate change related to greenhouse gases in the atmosphere. Ozone layer depletion due to indiscriminate use of chlorofluorocarbons. The active chlorine atoms strip the ozone layer preventing filtering of the sun's ultraviolet rays. Asian Productivity Organization, Tokyo
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1.2.4 Regional Scenario
Regional Scenario
z z z z
Pollution Environmental Degradation Resource Depletion Biodiversity
To develop a strategy for sustainable development in the Asian region it is necessary to take stock of the environmental issues facing the region. Environmental issues in the region can be categorized as follows: pollution environmental degradation resource depletion biodiversity Uncontrolled industrial development and growth has led to extensive pollution of air, land and water (surface, groundwater and coastal waters). This pollution has resulted in degradation of the environment and natural resources. Land degradation has led to loss of arable land, increasing aridity and desertification. Degradation and overexploitation of water resources has led to water scarcity. Overexploitation of natural resources for fuels and minerals has resulted in depletion of resources. An export-led development that catered to the resource needs of the developed countries has led to excessive depletion of mineral and fossil fuel resources in large parts of the region. Degradation and resource depletion has manifested itself in the form of species loss, resulting in loss of genetic diversity in terrestrial, aquatic and marine ecosystems. Each of these aspects is dealt with in greater detail in the following parts of this section.
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1.2.5 Regional Scenario Pollution
Regional Scenario - Pollution
Air Pollution Forest Fire Hazard Marine Pollution Toxic wastes Solid wastes
A world bank and ADB sponsored study in 1995 showed that the areas with critical loads up to 320 milligrams per square meter per year (that is, area that are most susceptible to acid deposition) are located in South China, the areas south-east of Thailand, Cambodia and southern Vietnam
Development in the Asian region has been characterized by urbanization and industrialization which have had deleterious impacts, leading to high pollution loads and social stress. Air pollution, particularly transboundary, is a problem that has accompanied economic growth and high energy consumption. The effects of coal burning tend to spread over a large area, resulting in acid deposition. The problem of acidification has also started to emerge in parts of Asia and the Pacific region. Urban air pollution is a serious problem in many major cities of the region. Significant health threats also arise from indoor air pollution resulting from the use of low-quality solid fuels, such as coal, wood, crop residues, and dung for cooking and heating in lower-income urban households and in rural areas throughout the region. Fly ash generated from the mining of coal is also a significant problem in the region, particularly in India, where the effects are as serious as those caused by acid rain elsewhere. Slash-and-bum agriculture and the clearing and burning of forests for oil palm plantations leads to haze problems that extend beyond national boundaries, as occurred in the Indonesian forest fires of 1997. It must be noted that these fires were not a "natural disaster," nor were they the result of agricultural practices. They were essentially the result of an economic policy based upon the overexploitation of natural resources. Most of the fires were deliberately set by plantation companies to clear the land and the ensuing haze caused widespread health problems, and disrupted air, sea and road traffic. It also had a widespread regional impact, affecting Malaysia, Thailand, Brunei, Singapore and even the Philippines and Australia.
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1.2.5 Regional Scenario Pollution
Coastal and marine pollution in the Asian region arises mainly from direct discharge from rivers, surface runoff, drainage from port areas, domestic and industrial effluents, and various contaminants from ships. About 70 % of the waste effluent discharged into the Pacific Ocean has no prior treatment and more than 40% of marine pollution in the region is derived from land-based activities through riverine discharge. The main problems are heavy metal and pesticide contamination; algal blooms due to nutrient build-up caused by industrial effluent and dumping of solid waste into the sea. Aquaculture has resulted in loss of coastal habitats, including a substantial loss of mangrove forests in South-East Asia. This has had a negative impact on commercial fisheries, particularly in Thailand and the Philippines. Toxic wastes contributed by industries and agriculture are predominantly pesticides and heavy metals. Extremely difficult to degrade, they accumulate in the food chain. Extensive and reliable data on the generation of toxic and hazardous wastes in the region are not available. The 1995 estimates indicate that about 100 million tons are produced annually, with as much as 90% generated in China and India. About 60-65% of these wastes end up in landfills; 5-10% are dumped in the oceans; and only about 25% are either incinerated or undergo physico-chemical treatment. However, there is growing awareness in the region, especially in Japan, China, and India, of waste detoxification. About 700 million tons of solid waste and 1,900 million tons of industrial waste are generated each year in Asia and the Pacific. Among the various sub-regions, East Asia generates the largest share of municipal solid waste. The key issues regarding solid waste management are the environmental health implications. These are due to the improper storage of rubbish prior to collection and poor standards of disposal. It is estimated that 30-50% of municipal solid waste is uncollected. The disposal of domestic and industrial waste is given relatively low priority in many countries, with only around 70% of the waste in urban municipal areas being collected and only some 5% of this being treated. Solid waste disposal is a particular problem in the small island states such as Fiji, Maldives, and Western Samoa due to their limited land area. Disposal areas have been used for land reclamation in some of these countries, resulting in contamination and pollution of surrounding coastal areas.
Oil pollution is severe in the Straits of Malacca along the west coast of India (Total deposits of up to 1,000 tons of tar per year)
Implementation of Agenda 21: Review of the progress made since the UN Conference on Environment and Development,, New York, United Nations Department for Policy Coordination and Sustainable Development, Division for Sustainable Development April,1997.
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1.2.6 Regional Scenario - Environmental Degradation
Regional Scenario - Environmental Degradation

Land Landdegradation degradation Deforestation Deforestation Desertification Desertification
Only 15% of the total land area is considered arable.
z
South-East Asia has the highest absolute deforestation rates.

z z 35% of productive land in Asia is now desertified.
The contribution of human activities to land degradation in the region has been estimated as: 37% by removal of vegetation cover, 33% overgrazing by livestock, 25% unsustainable agricultural practices, 5% overexploitation through construction of infrastructure.
The Asia and Pacific region occupies 23% of the world's total land area and has 58% of the world's population. In most developing countries in the region, soils suffer from varying degrees of erosion and degradation mainly due to rapid rates of deforestation, poor irrigation and drainage practices, inadequate soil conservation, steep slopes, and overgrazing. Of the world's 1.9 billion hectares affected by soil degradation, the largest area (850 million hectares) is in Asia and the Pacific, accounting for about 24% of the land in the region. In 1996, studies by United Nations Environment Program, World Resources Institute, United Nations Development Program and the World Bank showed that 13% of arable land in the region is considered to be severely degraded, 41% moderately degraded, and 46% lightly degraded Only 10-30% of natural habitats are left in many countries in the region and 24% of the land in Asia-Pacific is affected by soil degradation. Only 15% of the total land area is considered arable. More than 50% of the world's irrigated land affected by water logging and salinization is located in Asia and the Pacific. Increased dependence on intensive agriculture and irrigation may exacerbate the situation. This is a serious concern, especially since irrigated lands are expected to increase significantly in the near future. A total of 35% of productive land in Asia is now desertified. The region has the largest population in the world affected by the process. The countries suffering most from desertification are China, Afghanistan, Mongolia, Pakistan, and India. Due to industrialization, agricultural expansion, and forestry product trade, deforestation remains one of the major environmental issues in the region. Deforestation in the region increased from 2 million hectares per year during 1976-81 to 3.9 million hectares per year in 1981-90. At the current rate of harvesting, the remaining timber reserves in Asia may not last for more than 40 years
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The countries experiencing the fastest deforestation are Bangladesh, Pakistan, Philippines and Thailand.
Source: Global Assessment of Human Induced Soil Degradation

1.2.7 Regional Scenario Resource Depletion
Regional Scenario - Resource Depletion

declining decliningavailability availability of of fresh freshwater water deteriorating deterioratingwater water quality quality depletion depletionof ofnonnonrenewable fuel renewable fueland and mineral mineralresources resources
Water scarcity: Freshwater availability of below 1,000 cubic metres per capita per year indicates water scarcity. India is projected to fall into the water-stress category before 2025. Fossil fuel and energy demand: The region accounted for about 41% of world coal consumption in 1993.
Resources facing serious threats of depletion include water, nonrenewable fossil fuels and minerals. A Survey by UNEP and the International Lake Environment Committee in 1994 showed that 54% of the lakes in the Southern East Asia suffer from eutrophication problems. The region is comparatively well endowed with water resources. Only a part of the renewable water resources can be extracted and used, due to the high variability of stream flow between low water and flood seasons, the inaccessibility of some watercourses, and the lack of storage sites on many catchments. High rates of urbanization and industrialization are pushing up domestic and industrial demand for water. This demand will continue to rise in the region in parallel with population growth. Afghanistan and Iran suffer from chronic water shortages due to aridity, while parts of China and India experience the same problem primarily due to high population density. Agriculture accounts for 60-90% of the annual water withdrawal in most countries of the region, with the highest proportion in Afghanistan (99%). Water pollution in countries in Asia and the Pacific is caused mainly by domestic sewage, industrial effluents, and runoff from activities such as agriculture and mining. The problem of pathogenic pollution is quite severe in South Asia, South-East Asia, the Pacific Islands, and China. The main source is domestic sewage that is discharged untreated into watercourses.
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1.2.7 Regional Scenario Resource Depletion
South Asia and China are most severely affected by organic matter pollution, the main source of which is effluent from the pulp and paper, and food industries. Discharge of mine tailings and development of industrial areas with direct discharge of pollutants into neighboring river systems has resulted in hot spots of heavy metal pollution throughout the region. Overexploitation of groundwater has led to saline water ingress in Thailand, and parts of India. Further loss of groundwater has been due to extensive contamination by industrial pollution. In countries like Bangladesh, salinity and sedimentation are occurring largely as a result of upstream water withdrawal. Fresh-water availability below 1,000 cubic meters per capita per year indicates water scarcity. India is among the countries projected to fall into the water-stress category before 2025. Its situation is well illustrated by the case of Rajasthan, which is home to 8% of India's population but claims only 1 per cent of the country's total water resources. One of the important implications of economic growth in Asia and the Pacific over the last three decades has been the increased demand for energy and, therefore, for fossil fuel. The region, excluding Japan, Australia, and New Zealand, accounted for 21% of the world's primary commercial energy demand in 1992 as compared with 51% for members of the OECD and 28% for the rest of the world. The growth in energy demand for the whole region was 3.6% per year between 1990 and 1992, compared with average world growth of 0.1%. The region accounted for 41% of world coal consumption in 1993. Mineral and non-renewable fuel resources continue to occupy a prominent position in exports and are one of the main sources of foreign exchange.
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1.2.8 Regional Scenario Biodiversity

Regional Scenario - Biodiversity

Genetic Geneticerosion erosion Loss Lossof ofbiodiversity biodiversity Species Speciesextinction extinction Natural Natural ecosystem ecosystemloss loss

Only 10-30% of natural habitats are left in many countries in the region.
The underlying causes of loss of biodiversity in the region include: International trade, particularly in timber, (which results in forest habitat losses) Population growth (leading to accelerated rates of land use change) Poverty (in conjunction with demand leading to unsustainable consumptive use of common access resources) The introduction of non-native species (leading to destruction of predatory/prey equilibrium) Improper use of agro-chemicals ( leading to loss of aquatic species)
The rainforests of South-East Asia contain some 10% of the worlds flora. The region as a whole accounts for two-thirds of the world's flora. Almost all the nations in the region (with the exception of Singapore and Brunei Darussalam) depend heavily on direct harvesting from nature. The flora and fauna of the region are more threatened now than ever before. The drive for increased agricultural production has resulted in the loss of genetic diversity. Land under rice cultivation rose between 1960 and 1970 by only 25% but production rose by 77% due to the replacement of traditional varieties with higher-yielding, semi-dwarf varieties. By 2005, India is expected to produce 75% of its rice from just 10 varieties, compared with the 30,000 varieties traditionally cultivated. In Indonesia, 1,500 varieties of rice disappeared during the period 1975-90. Terrestrial biodiversity loss in various ecosystems has been identified as a major concern, but losses have still to be quantified. Overall habitat losses have been most acute in the Indian sub-continent, China, Vietnam, and Thailand. The Indo-West Pacific is the center of shallow-water marine biodiversity. Coastal habitat loss and degradation, combined with increased sediment, nutrient, and pollutant discharge into coastal areas, are a major cause of concern, particularly in the insular countries of the region. Loss of keystone species, extensive deforestation and habitat loss, increased trafficking in animals and animal body parts, large-scale conversion of land for agriculture, and the construction of large dams has also contributed to loss of biodiversity. Given this regional scenario, it is clear that never before has there been such an urgent need to develop a strategy that will steer Asian economies in a sustainable direction.
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With only 10-30% of natural habitats left in many countries, any further decrease could have much more serious consequences for biodiversity than the initial stage, when 50% of the original habitat was lost.

1.2.9 Cost of Environmental Damage
Cost of Environmental Damage
ASIAN REGION - 5% OF ANNUAL GDP CHINA--- 10% OF ANNUAL GDP INDIA --- > 5% OF GDP Estimated worldwide ex penditure for purchasi ng and maintai ning end-of-pipe JAPAN --- 1% OF GDP technologies is over US$ 3 in 1995.
BILLION.
World Bank estimates in 1992 East Asian cou ntrie s would spend up to $ 20 bil li on a year during the 199 0s to clean up environmental damage brought abo ut by ra pid in dustria lizatio n and population growth.
Asian Productivit y Organizati on, Tokyo 6
4.5 Trillion Yen in Environmental Damage
Cost incurred by Japan from the loss by damaging the environment in 1995 was calculated as 4.5 trillion yen in real terms which was about 1% of GDP.
Ramankutty, R., Brandon, C. Asia and the Pacific, Asia Region Technical Department's Environment and Natural Resource Division (ASTEN), World Bank, 1999. http://wwwesd.worldbank.org/envmat/ voL1f96/ asiapac.htm Asias emphasis on rapid economic growth without equal attention to the environment has resulted in widespread environmental damage. The resulting costs are large even in simple economic terms. The costs of environmental degradation in Asian countries such as India are above 5% of annual GDP, and for China may be as high as 10%. The World Bank estimated in 1992 that East Asian countries would spend up to US$ 20 billion a year during the 1990s to clean up environmental damage brought about by rapid industrialization and population growth.
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1.3 1.3 Response Response to to Environmental Environmental Concerns Concerns

1.3.1 Public Concern
Public Concern
Societal demand for a cleaner environment and a better quality of life is increasing. Public concern is being expressed as: protests/law suits consumer boycotts of products willingness to pay a premium for ecofriendly products
z z z
Sto p th Pol e luti on
Incidences Love Canal Episode, USA Minamata Bhopal gas Tragedy Bangladesh Wells Rivers like Ganges, Yamuna, Yangtze, Irrawady etc.
Cause Result Toxic Waste Poisioning Mercury Poisioning MIC Gas release PUBLIC Arsenic Poisioning of the Ground PROTEST water Industrial wastewater & domestic sewage discharge
Public concern about environmental damage today stems largely from the costs it imposes in terms of health and deteriorating quality of life. In industrialized countries, public concern over environmentally unsound practices began in the 1960s. In the US, incidents such as the poisoning of Love Canal with toxic wastes triggered a public outcry. Mercury poisoning in Minamata, the Bhopal Gas tragedy in India and the more recent Arsenic poisoning of well waters in Bangladesh attracted widespread attention. There is also growing public concern over the progressive pollution of Asian rivers such as the Ganges, Yamuna, Yangtze and Irrawady from industrial wastewater and domestic sewage discharge. Recently, public activism in Asia against the unsound environment practices of industry has increased. Thousands of non-complying industries in India, for instance, have been forced to close down either through public interest litigation or through judicial intervention based on public concern. Protests are focusing on: Demands for better health and living conditions targeted primarily against industrial degradation of air, land and water Loss of habitation due to acquisition of resources for industrial and other developmental activity. Globalization of environmental standards and social ethics in industrial production, consumption and trade.
z
Public concern is expressed not only through protests but also as green consumerism. On the one hand, this takes the form of consumer boycotts. On the other, it shows as a willingness to pay a premium for eco-friendly products.
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1.3.2 International Treaties
Environmental Treaties and Conventions

International treaties and conventions to address global issues
z z
IMPACT Phase Phase out out of of:: z z hazardous hazardous materials materials z lead in petrol z lead in petrol z z CFCs CFCs in in refrigeration refrigeration z z GHG GHG emitting emitting processes processes Biodiversity conservation Biodiversity conservation promotion promotion
Basel BaselConvention Convention Montreal MontrealProtocol Protocol Climate ClimateChange ChangeConvention Convention Convention Conventionon onBiodiversity Biodiversity Convention Conventionto toCombat Combat Desertification Desertification
z z
z z
z z
z z
Recognizing the global implications of environmental degradation, the international community responded through treaties and conventions. They recognized that the impact of unsustainable development has moved from local to regional to global levels. Impacts no longer recognize boundaries. Some of the landmark conventions are listed below: Management of hazardous wastes and their transboundary movements are regulated by the Basel Convention on Transboundary Movement of Hazardous Wastes (and their handling) 1989. Montreal Protocol regulates the manufacture, use and disposal of ozone depleting substances. Climate Change Convention regulates the emission of green house gases (GHGs) that have contributed to global warming. Convention on Biodiversity is aimed at conserving the species diversity of biological organisms. Convention to Combat Desertification is aimed at preventing further desertification and increased aridity by promoting sustainable land management practices. These conventions have resulted in the phasing out of CFCs in refrigerants and hazardous materials such as PCBs, lead and asbestos. They have also promoted the use of renewable sources of energy. Trade is also reflecting environmental issues as it becomes more globalized. The WTO is including environmental conditions in its rules. It is clear that production, consumption and associated trade are strongly interlinked and are driving environment to be an integral part of business strategy. National and international policies are being forced to view environment as a crucial aspect of any agenda for development. Asian Productivity Organization, Tokyo
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United Nations Environment Programmes web site http://www.unep.org

1.3.3 Sustainable Development and Agenda 21
Sustainable Development and Agenda 21

Sustainable Development development development that that meets meets the the needs needs of of the the present present generation generation without without compromising compromising the the ability ability of of the future generations to the future generations to meet meet their their needs. needs. ..Our ..Our Common Future, 1987. Common Future, 1987.
Agenda Agenda 21, 21, is is a a 300 300 page page plan plan for for achieving achieving sustainable sustainable development development in in the the 21st 21st century. century. It It was was adopted adopted in in the the first first international international Earth Earth Summit, Summit, at at the the United United Nations Nations Conference Conference on on Environment Environment and and Development Development (UNCED) (UNCED) held held in in Rio Rio de de Janeiro, Janeiro, Brazil, Brazil, on on 14 14 June June 1992 1992
The growing global environmental crisis has led to a consensus response in the move towards sustainable development. The United Nations Conference on Environment and Development (UNCED) in Rio De Janeiro, 1992, resulted in an Action Plan towards sustainable development. Agenda 21 represents international consensus, following two years of research, drafting and intensive negotiations at the four meetings of the UNCED Preparatory Committee, on actions necessary to move the world towards the goal of sustainable development. It is a comprehensive document covering all the issues referred to UNCED by the UN General Assembly in its Resolution 44/228 of 1989. The conference accepted the definition of sustainable development presented by the World Council of Environment and Development in its book Our Common Future, 1987. Agenda 21 deals with all issues of environment and development, including issues of socio-economic development; inequality in the use of resources between nations and within nations; intergeneration equity; population and the carrying capacity of the earth; and the need for cooperation between nations. The last few years have seen a number of national, regional and global initiatives towards the challenges of sustainable development, as outlined in Agenda 21.
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1.3.4 Response to Agenda 21
Response to Agenda 21
z
Countries set up their own Local Agenda 21 plans. Formation of the World Business Council of Sustainable Development (WBCSD), 1992
Formation of Malaysian Business Council of Sustainable Development, 1992
z WBCSDs Declaration for sustainable development stressed on eco-efficiency in production - More for Less
Implementation of Agenda 21 required its translation into countrylevel plans that would recognize local issues and give priority to addressing them. The Asia Pacific National Councils for Sustainable Development was formed to help countries set up their own National Councils as well as to coordinate activities in the region. This council is part of the United Nations Council for Sustainable Development. Corporate responses to Agenda 21 to steer industrial development in a sustainable direction included formation of the World Business Council of Sustainable Development (WBCSD) in 1992. The declaration of the WBCSD was signed by about 50 business leaders from both developed and developing countries. The WBCSD is a coalition of 120 international companies united by a shared commitment to the environment and to the principles of economic growth and sustainable development. Its members are drawn from 33 countries and more than 20 major industrial sectors. The WBCSD also benefits from a thriving global network of 9 national and regional business councils and 4 partner organizations. The Malaysian Business Council of Sustainable Development (MBCSD), was created in 1992 to join this global network. Similarly, Indonesia has joined the network with its Indonesian Business Council of Sustainable Development (IBCSD). The WBCSD provides a powerful and unified business voice on sustainable development issues. It plays an important role in developing closer cooperation between business, governments and others, and in encouraging high standards of environmental management in business itself. The term eco-efficiency in production was coined by the WBCSD in its declaration. It was first introduced as a concept in 1992 in Changing Course, the councils report to the Rio Earth Summit.
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1.3.5 Industry Initiatives
Corporate Response
Corporate responses to Agenda 21 have been in the form of a number of voluntary initiatives. These include agreements, programs, standards and codes of conduct. Predominant among them are:
z
Responsible Care Environmental Stewardship Corporate Environmental Policy and Reporting Certification such as ISO 14000, SA 8000
Responsive Care is a voluntary initiative for developing and implementing guidelines, activities, recommendations and voluntary self restrictions for environmental protection. It is centered on a set of fundamental guiding principles and six codes of management practices.
Voluntary initiatives refer to industry action that goes beyond applicable environmental laws and regulations. A voluntary initiative may nevertheless be (1) legally binding (in the case of a signed contract), (2) mandatory (if it becomes a condition for membership in an industry association, e.g., in a country where Responsible Care is being implemented), (3) compulsory (if it becomes a de facto marketing requirement, e.g., ISO 14000), (4) used to encourage compliance with existing laws. Responsible Care is the worldwide chemical industry program for continuous improvement of safety, health and environmental performance. It was started in Canada in 1984, was adopted in the U.S. in late 1988, and in Western Europe and Australia in 1989/90. Today, Responsible Care is being implemented in 40 countries. In the AsiaPacific region it is being implemented in Australia, New Zealand, Philippines, Hong Kong, Malaysia, Singapore, Taiwan, Japan and India. Environmental Stewardship addresses proper use and disposal of products in the market. Marine Stewardship for the food processing sector addresses responsible fish harvesting practices, and Forest Stewardship for the pulp and paper sector promotes sustainable forest. A landmark stewardship initiative is Extended Product Responsibility (EPR). Important features of EPR include structuring production processes so that one industry's waste can be used by another, and designing products that avoid the use of hazardous materials so that they can easily be remanufactured or the materials in them recovered. EPR had its origins in Western Europe where policy makers have focused primarily on the last stage of the product cycle, particularly the take-back of used materials. In Germany, the concept has been applied to a packaging ordinance, whereby consumers, retailers and packaging manufacturers share in this responsibility, with the financial burden for waste management falling on the retailers and packaging manufacturers.
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1.3.5 Industry Initiatives
Corporate Environmental Policy (CEP) is a commitment of a business to environmental excellence as a part of corporate mission and vision. CEP accepts the guiding principles of precautionary approach, polluter pays and accountability. It enables the adoption of practical measures, ensures transparency, and must include environment in corporate training schemes. CEP is a requirement of most voluntary initiatives, codes of conduct and international voluntary standards, such as Responsible Care and ISO 14000. Closely linked to Corporate Environmental Policy is Corporate Environmental Reporting (CER), a voluntary disclosure of environmental performance by companies. CER serves as a vehicle for greater accountability to stakeholders and as a catalyst for internal change by acting as a benchmarking tool. It also serves as a catalyst for the evolution of internal management systems, improvement of performance, and the emergence of new forms of accountability. While all these are voluntary initiatives which an organization may choose to adopt depending on its business priorities, ISO 14000 certification for environmental management systems has become almost an essential requirement in international business.
http://www.iso.ch for information on the ISO standards
http://www.cepaa.org for information on the SA 8000 standards
ISO 14000 is a set of voluntary standards designed to help enterprises run environmental management systems. Under development by the International Standards Organization (ISO) since 1991, these standards define the key elements of a management system that will help an organization address the environmental issues it faces. The management system includes: (1) setting of goals and priorities (2) assignment of responsibility for accomplishing them (3) measuring and reporting on results and (4) external verification of results. The standards do not set performance values but provide a way of systematically setting and managing performance commitments. As the world moves towards sustainable development, the bottom line is not just economic and environmental performance, but also social performance. Consumers are demanding environmentally and socially sound business practices.
ISO 14000 and SA 8000 have been shown to influence trade and the supply chain, especially between developed and developing countries.
In answer to this demand, the Social Accountability (SA) 8000 standards have been established by the Council of Economic Priorities. The councils accreditation agency, CEPAA, provides certification. SA8000 provides transparent, measurable, verifiable standards for certifying the performance of companies in nine areas: child labor; forced labor; health & safety; freedom of association; discrimination; disciplinary practices; working hours; compensation and management of the implementation and review of SA 8000 compliance.
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1.3.6 Eco-efficiency
Eco-efficiency, Factor 4 and 10

z
Eco-efficiency emphasizes economics, in addition to environmental improvement. It is concerned with resource productivity, that is, maximizing the value added per unit of resource input. The Wuppertal Institute in Germany coined the term Factor 4 to show that it is possible to quadruple resource productivity given the present state of technology. Rising levels of consumption and a doubling of the world's population over the next 40-50 years would require a factor 4 increase in food production, a factor 6 increase in energy use and at least a factor 8 growth in income. Resource Efficiency
The Factor 10 Club, an international body of senior government, non-government, industry, and academic leaders believes that within one generation, nations can achieve a ten-fold increase in the efficiency with which they use resources.
As a corporate strategy, eco-efficiency stresses economics, in addition to environmental improvement. Its focus is not merely reducing material use and waste, but also with resource productivity, i.e., maximizing the value added per unit of resource input. The WBCSD believes that by applying the principles of eco-efficiency, increased value for customers can be created through the sustainable use of resources. Efficiency in resource productivity is also reflected in the term Factor 4. This term was coined by the Wuppertal Institute for Climate, Environment and Energy, when it chronicled 50 examples of quadrupling resource productivity. Most of the examples exist today as widely available technologies. They include energy efficient homes, office buildings, kitchen appliances, lighting, farming systems, and motors and are all off-the-shelf, competitively priced technologies. Others are well-reasoned, technical possibilities, poised for implementation. Factor 4 has been surpassed by a Factor 10 Club of business executives and scientists (mostly in Europe) which is researching and promoting 90% reductions in resource use. The Factor 10 Club is an international body of senior government, nongovernment, industry, and academic leaders working out of Germany's Wuppertal Institute since 1994. The Club believes that within one generation, nations can achieve a ten-fold increase in the efficiency with which they use energy, natural resources and other materials. Such a goal is within the reach of technology and, with appropriate policy and institutional changes, could be brought within the reach of economics and politics. A leap in energy and resource productivity of this magnitude would strengthen the basis for sustainable social, economic and environmental progress.
Factor Four: Doubling Wealth, Halving Resource Use, by Ernst von Weizsacker, Amory B Lovins and L Hunter Lovins, Wuppertal Institute for Climate, Environment and Energy, Germany, 1998.
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1.4 1.4 Environmental Environmental Management Management Trends Trends

1.4.1 From Environmental Protection to Eco-Sustainability
Environmental Management Trends

GP
Prevention Treatment Dilution and Dispersion Ignore
1990s
1980s 1970s 1960s 1950s
In the 1950s one common response to environmental pollution problems was to ignore them. This was possible when the problems were relatively small and the awareness of the health and environmental impacts was not high. In the 1960s, a common approach to pollution was to dilute and disperse concentration of the pollutants, for example by constructing tall smokestacks and extending pipelines into the sea to dilute water pollutants. It was soon realized that this approach did not solve the problem. Many pollutants have been found to be toxic even at small concentrations. Some chemicals retain their toxicity for a very long period, accumulate in soil and water, and eventually find their way into the food chain. When the environments assimilative capacity for pollutants was exceeded, there were efforts to establish environmental standards to regulate the discharge of toxic substances. In the 1970s, treatment systems were introduced to ensure the discharge from industries and other enterprises met stipulated environmental quality standards. Installation of treatment systems was termed the end-of-pipe approach.
contd
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1.4.1 From Environmental Protection to Eco-sustainability
As the discharge standards became more stringent, the cost of endof-pipe treatment of wastes became more expensive and affected the economic viability of some industries. In some industrial countries, treatment costs reached as high as 2% of gross national product by the late 1970s. Despite the high costs, the end-of-pipe approach was found to be inadequate. In fact, some industries relocated to countries that did not have stringent environmental standards. It became evident that end-of-pipe treatment did not eliminate the pollutants, but merely transferred them from one environment to another. Industry then began exploring technological options to reduce pollution at source, i.e., pollution prevention through practices such as Cleaner Production.
World Commission on Environment and Development, Our Common Future, Oxford University Press, Oxford, p.210-211, 1987.
The 1990s has seen the need to ensure pollution prevention through efficient resource utilization. Concepts of sustainable development and green productivity, eco-design, product life-cycle and ecosustainability are emerging as interface areas with the concept of pollution prevention and cleaner production. End-of-pipe is, however, increasingly being used and will need to be used as a means of handling the residual waste generated after source reduction.
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1.4.2 Pollution Prevention and Source Reduction
Pollution Prevention and Source Reduction

Profits End -of Pipe Treatment Costs
Source Reduction Waste Minimization Pollution Prevention Cleaner Production
Profits
The focus on end-of-pipe treatment in the late 70s and early 80s led to prohibitively high costs of treatment. This led businesses to reexamine their manufacturing practices. Governments, international organizations and associations began to work on developing policies and initiatives to tackle these mounting costs. While businesses moved from a position of clean-up to one of avoiding pollution and waste, programs to support waste minimization, cleaner production and source reduction emerged. Cleaner Production (CP) is the continuous application of an integrated preventive environmental strategy applied to processes, products and services. It embodies the more efficient use of natural resources and thereby minimizes waste and pollution as well as risks to human health and safety. CP starts from issues of environmental efficiency, which have positive, economic benefits. It encompasses products, manufacturing processes and services. The Cleaner Production Program was launched by the LTNEP Industry and Environment Office in 1989. Unlike waste minimization, pollution prevention or source reduction methods that are restricted to reducing the amount of waste produced by the manufacturing process, the scope of CP extends across production processes, to product and services. A life-cycle perspective is thus included in its definition. Pollution prevention and CP were promoted extensively through programs both in the developed and developing countries by UNEP, UNIDO, USEPA and national governments.
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1.4.3 Beyond Pollution Prevention
Beyond Pollution Prevention

Holistic, integrated strategy to enable sustainable development
Pollution Prevention Source reduction
When scrap, harmful substances, or energy forms are discharged into the environment as pollution, they are a sign that resources have been used incompletely, inefficiently or ineffectively .. But although pollution prevention is an important step in the right direction, ultimately companies must learn to frame environmental improvement in terms of resource productivity
End-Of-Pipe treatment
By By considering consideringpollution pollutionprevention preventionseparately separately form formother othermanufacturing manufacturingneeds needssuch suchas as productivity productivityand andquality quality improvements, improvements,most most pollution pollutionprevention preventionprograms programsfail failto todevelop developthe the vital vitalsynergies synergiesand andworking workingrelationships relationshipswith with manufacturers manufacturersthat thatare areessential essentialto todrive driveboth both pollution pollutionprevention preventionand andmanufacturing manufacturing competitiveness... competitiveness... The TheUS USCongress, Congress,Office Officeof ofTechnology Technology
Compared to conventional end-of-pipe treatment alone, pollution prevention is usually more cost-effective, often resulting in reduced energy and material usage and lower treatment costs. It can produce significant benefits such as reduced environmental impacts from lower energy and material usage. As prevention and source reduction of pollution began to be actively adopted it was realized that, in contrast to end-of-pipe only treatment, these methods reduce the conflict between environmental protection and industrial competitiveness. However, for development to be sustainable, both environmental protection and profitability need to be addressed simultaneously. Businesses will have to go beyond pollution prevention. The US Congress, Office of Technology, in its report Industry, Technology and the Environment -- Competitive Challenges and Business Opportunities, recognized that for a program to be effective it must synergies and integrate pollution prevention with the manufacturing needs of an industry. This is captured in the following statement extracted from the report: By considering pollution prevention separately form other manufacturing needs such as productivity and quality improvements, most pollution prevention programs fail to develop the vital synergies and working relationships with manufacturers that are essential to drive both pollution prevention and manufacturing competitiveness. The wisdom in considering pollution prevention in tandem with manufacturing needs also arises from the fact that, in principle, there are a lot of similarities between pollution prevention and improvement of manufacturing efficiency. In both cases, production process is examined in greater detail and the focus is on continually improving the process to improve quality, productivity and reduce pollution.
U.S. Congress, Office of Technology Assessment, Industry, Technology and the Environment: Competitive Challenges and Business Opportunities, OTA-ITE586. Washington, DC: US Government Printing Office, January 1994.
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1.4.4 Resource Efficiency and Sustainability
Resource Efficiency and Sustainability

Sustainable Development
Resource efficiency is one of the key issues in sustainable development.
Resource Efficiency
Sustainability thus emerges as a crucial component of any successful paradigm to guide development in the new Millennium. Requires a new emphasis on the nature and size of inputs to development, especially energy, resource, chemical and other material input.
Related Relatedterms termsand andconcepts conceptsthat thatare are emerging include: emerging include: Eco-efficiency Eco-efficiency Eco-sustainability Eco-sustainability z z Eco-design Eco-design z z Product ProductLife-Cycle Life-Cycle z Green z Green Productivity Productivity
z z z z
The 1990s have seen the emergence of the belief that there is a need to go beyond pollution prevention if development is to be made sustainable. Businesses, governments and international agencies are increasingly recognizing that sustainable development requires influencing both consumption and production patterns. The past decade has witnessed a transition from compartmentalized approaches to profitability and environmental protection towards a more integrated approach of resource efficiency. This cannot be achieved by technological change alone; goals, assumptions and the very philosophy of business has to change. This trend is, however, still at a nascent stage in developing countries, where increasing population and uncontrolled industrial growth are putting enormous pressure on natural resources. Concepts that have emerged supporting this transition towards a more sustainable pattern of development are: Eco-efficiency: Efficiency in resource utilization to produce the same level of goods/services was introduced with the concept of "ecoefficiency" by the World Business Council of Sustainable Development in 1992. This reflected the issue of sustainability of resource utilization in manufacturing. "Eco-efficiency is reached by the delivery of competitively priced goods and services that satisfy human needs and bring quality of life while progressively reducing ecological impacts and resource intensity throughout the life-cycle to a level at least in line with the earth's estimated carrying capacity."
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1.4.4 Resource Efficiency and Sustainability
Eco-sustainability: The principle of eco-sustainability, like ecoefficiency, recognizes the finiteness of natural resources and the need to utilize them efficiently. The core concepts of the principle of eco-sustainability are: No adverse long term effects on ecosystems. Rate of use of natural resources is less than the rate of renewal of the resources. Growth is within the carrying capacity of the environment. Eco-design: This is a design process in which environmental attributes are treated as a design objective rather than a constraint. The environmental attributes are added to the regular design objectives. One of the most well-known eco-design programs is the Design for Environment (DfE). It seeks to incorporate environmental objectives with no or minimum loss of product performance, useful life or functionality. Differences occur as to which environmental attributes and general goals should be included, leading to differences in terminology such as Sustainable Product Development, Life Cycle Design, Green Product Design etc. DfE guidelines vary between different countries, however , the focus here is on eco-friendly product design. The Dutch Manual for Environment Oriented Product Development probably contains the most detailed elaboration of the environmental objectives for product development. A distinction is made between: Design for alternative need fulfillment. Design for product lifetime extension. Design for minimal materials use and selection of most environmentally compatible materials. Design for closure of materials cycles. Design for energy conservation. Design for cleaner production. Design for efficient distribution and logistics. Product Life-Cycle: The entire life-cycle of the product from extraction, through manufacturing to product use and disposal is considered in evaluating the environmental burden of a product. This approach originated in Europe and is considered the most holistic approach to eco-friendly product development.
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1.4.5 Productivity Practices
Productivity Practices
z
Traditional focus of productivity was ensuring cost effectiveness through cost reduction. The quality drive and customer satisfaction was the next focus
Quality
Productivity Productivity
z Programs to improve productivity by Cost influencing the internal organization of an industry emerged. The most popular have been Kaizen, TQM, TPM etc.
The Thenext nextstep steprequired requiredintegration integration of of"Environment" "Environment" into these productivity improvement into these productivity improvementprograms. programs.
Environment
Traditionally, productivity improvement focused on cost effectiveness through cost reduction. Therefore, to improve profitability or organizational effectiveness, the approach used was cost reduction. With the advent of the quality drive, productivity had to be measured by comparing the benefits accrued from a quality program (output) with the resources used within the programs (inputs). In an attempt to improve productivity by influencing the internal organization of an industry, a number of programs emerged. The most popular have been TQM; Total Productive Maintenance (TPM), which addresses equipment maintenance; 5S, which ensures structured and systematic housekeeping in an enterprise; and Kaizen, which is a philosophy committed to continual improvement. To some extent, productivity practices such as preventive maintenance and good housekeeping reduce the environmental burden. However, for total environment management, it is necessary to integrate these productivity improvement programs. The need for a viable strategy that integrates environment into productivity improvement for industry, agriculture and services has never been higher, particularly in Asia. On the one hand, there are pressures (1) to achieve rapid industrial growth (from a limited resource base) while ensuring that there is no further deterioration of natural resources; (2) from the international marketplace to include the environment as a strategic business factor; (3) from increasing public awareness and concern for the environment and (4) from improving environmental regulation and enforcement. On the other hand, there is the impact from the recent East Asia economic crisis. In stabilizing the economy following the crisis, there has been a need for tight fiscal discipline. At such a time, public spending on environmental protection and the administration of regulatory agencies could be affected. Moreover, enterprises have limited financial resources and, if they have to compete in the international market, their business strategies have to be turned around. This process should be used as an opportunity by industry, agriculture and the services sectors, as well as policy makers, to steer the Asian economy towards sustainable development.
The total quality movement may be one vehicle through which environmental issues can be integrated into business as a whole.
Costing the Earth, Frances Cairncross
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GREEN
PRODUCTIVITY
ENVIRONMENT MANAGEMENT
5 -S & KAIZEN
TPM
TQM
Evolution of Green Productivity

Given this situation, it makes it all the more critical for development in Asia to be guided in a sustainable manner. It is clear that there are close links between productivity and sustainable development. It is internationally recognised that enhancing productivity will not be possible without protecting the environment. The ultimate objective of productivity improvement is to achieve a better quality of life for everyone. Productivity improvement also creates national wealth, which enables the society to invest more in environmental protection and rehabilitation measures. On the contrary, degraded environment means a direct threat to the quality of life, and, therefore, poses a challenge to productivity. Productivity, in a broad sense, is a measure of how efficiently and effectively resources are used as inputs to produce products and services needed by society. Productivity improvement means improvement in QCDMS: Q= Quality Higher quality that meets or exceeds customer requirements. C= Cost Lower Cost. D= Delivery Timely delivery as desired by the customer. M= Morale Boosting morale of all concerned. S= Safety Improving the safety of every aspect of the product and process. Asian Productivity Organization, Tokyo
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Productivity improvement means improvement in QCDMS: Q= Quality Higher Quality that meets or exceeds customer requirements C= Cost Lower Cost D= Delivery Timely Delivery as desired by the customer M= Morale Boosting morale of all concerned S= Safety Thinking and improving safety of each and every aspect of the product and process
Outputs are divided into two groups: desired outputs and undesired outputs. Undesired outputs are often called waste. The productivity of a system is determined by its desired outputs, which are usually regarded as final products. The primary aim of productivity improvement is to increase the ratio of desired outputs to total outputs. The elimination of waste in all forms, therefore, means productivity improvement. This will reduce the cost and improve the quality of the final product. By improving the ratio of desired outputs to total outputs (waste minimization) and enhancing quality in accordance with consumer demands (quality management system), total productivity is raised. The most important input factors are labor, capital, materials, energy and environmental protection costs. Current trends have shown that environmental issues, especially those relating to trade and industry, will become more important to the economies of countries in the near future. With this intensifying concern for the environment, manufacturers can not survive unless they meet environmental standards. The very survival of many of them is under threat because they continue to generate pollutants that they have to clean up (end-of-pipe). This approach increases costs and makes them less competitive. It is also very unpopular in the communities in which the companies operate. Successful enterprises adopt a prevention approach through green products, cleaner production processes and low waste technologies. Reducing consumption of energy and materials through technological innovation, design changes, and better housekeeping and maintenance, improves the quality of the products, reduces the level of pollutants and effluents discharged into the environment and reduces costs as well. In GP practices, the main objective is to identify ways to prevent pollution or waste at its source (increasing output and improving quality), as well as reduce the level of resource inputs through rationalization and optimization (decreasing input). The productivity improvement results of adopting GP practices are lower cost of production, decreased waste disposal and end-of-pipe costs. This shows that adopting GP practices and techniques does not require a new set of skills to be learned; rather, it is the application of productivity and management tools to a new set of priorities.
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1.4.6 From Productivity to Green Productivity
From Productivity To Green Productivity
Integration of Productivity and Environmental Management
Profitability and Environmental Protection
Sustainability and Quality of Life
The need to fundamentally change the approach to business by moving towards resource efficiency and taking a holistic life-cycle view of products was recognized in the 1990s. The need to ensure ecological and economic efficiency as the basis of future strategies in business was found to be essential if development was to be sustainable. Resource efficiency not only leads to protection of natural resources, but also results in improved productivity. These productivity gains are possible through improved product/service design, manufacturing processes and procedures; increased capital investment in more efficient technology; improved labor performance; increased levels of labor participation; and more effective research and development. These measures will also improve environmental performance, as shown earlier. Therefore, if development is to be sustainable, there is a need to move beyond pollution prevention and ensure that both productivity improvement and environmental protection are achieved simultaneously. Recognition of this integrated approach is reflected in the concept of Green Productivity. Green Productivity (GP) is a strategy of integrating environmental and social considerations with business and other activities. It was conceived and developed by the APO in 1994. The goal of GP is to attain a higher level of productivity to serve the needs of society, and to protect and enhance the quality of environment both locally and globally. GP leads to gains in profitability through improvements in productivity and environmental performance.
GP and eco-efficiency share a common vision. GP, however, looks at environment and productivity in an integrated manner to form the foundation of sustainability, considering the harmony needed between production as well as consumption.
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Learnings Learnings from from the the Lecture Lecture
At the end of this lecture, participants should be aware of the global and regional environmental concerns and the various strategies/approaches that have evolved in an attempt to manage them. The lecture should also have made the participants aware of productivity practices and how the focus has shifted from mere cost reduction to quality, and finally, to recognition of the need to integrate productivity improvements with environmental protection. Given this background, participants should at the end of the lecture be convinced of the need for an integrated strategy such as GP, particularly in moving the Asian economy in a sustainable direction. After listening to lecture, participants should have answers for the following questions: 1. 2. 3. 4. 5. 6. 7. 8. What is sustainable development? What have been the global developments in environmental management? Why was there a need for developing a program like GP? What is unique about GP that is not found in other programs aimed at environmental protection or productivity improvement? What is the basic strategy of GP? What are the benefits of GP and who are the beneficiaries? Why focus on SMEs in GP? How important is GP in addressing unsustainable production and consumption?
The next lecture will explain the concepts, practices and principles of GP.
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Bibliography Bibliography
Brandon, C., South Asia Region, World Bank, May 1998. Carson Rachel, Silent Spring, Boston, Houghton Mifflin Company, 1962. Cairncross, Frances, Costing the Earth: What Governments Must Do, What Consumers Need to Know, How Business Can Profit, The Economist-List Books, 1991. Cylke, O., Asia, The Environment and the Future of Development, in: An Asian Clean Revolution - US-AEP (Background Papers, July 1998). Porter, Michael and van der Linde, Class, Green and Competitive: Ending the Stalemate, Harvard Business Review, (Sept. /Oct.), 1995. Ramankutty, R., Brandon, C., Asia and the Pacific, Asia Region Technical Department's Environment and Natural Resource Division (ASTEN), World Bank, 1999. http: / /wwwesd.worldbank.org/envmat/ vol2f96/ asiapac.htm. Report of the workshop on Consumption in a Sustainable World held in Kabelvag, Norway, June 1998. Ministry of Environment, Norway. Robins N., Roberts., S, Changing Consumption and Production Patterns, Unlocking Trade Opportunities, HED, UK, 1997. Schrnidheiny Stephan with the BCSD, Changing Course, MIT Press, England, 1992. United Nations Department for Policy Coordination and Sustainable Development, Division for Sustainable Development. Implementation of Agenda 21: Review Of Progress Made Since The United Nations Conference on Environment and Development, 1992, April 1997, New York. U.S. Congress, Office of Technology Assessment, Industry, Technology and the Environment: Competitive Challenges and Business Opportunities, OTA-ITE-586 Washington, DC: US Government Printing Office, January 1994. Vaughan Scott., Trade and Environment: Perspectives of Developing Countries, UNEP, Environment and Trade, 1998. Weizsacker Ernst von, Lovins B. Amory and Lovins L Hunter, Factor Four: Doubling Wealth, Halving Resource Use, Wuppertal Institute for Climate, Environment and Energy, Germany, 1998. World Commission on Environment and Development, Our Common Future, Oxford University Press, Oxford, 1987. World Development Indicators, The World Bank, 1998 WRI/UNEP/UNDP/WB, Global Assessment of Human-Induced Soil Degradation, 1996.
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CHAPTER CHAPTER 1 1

Sustainable Development & Green Productivity

Asian Productivity Organization, Tokyo

Objective Objective of of the the Lecture Lecture

Asian Productivity Organization, Tokyo

Lecture Specific Instruction to the Resource Persons

Asian Productivity Organization, Tokyo

Economic Activity and Environment

Impact of resource extraction, use and disposal Drives Drives

Consumption Patterns Trade

Asian Productivity Organization, Tokyo

Pollution is a form of a waste and a symptom of inefficiency in industrial production

Asian Productivity Organization, Tokyo

Asian Productivity Organization, Tokyo

Industry and Environmental Degradation

Asian Productivity Organization, Tokyo

Trade and Environment

Asian Productivity Organization, Tokyo

Trade and Developing Countries

Asian Productivity Organization, Tokyo

1.2 1.2 Global Global Environmental Environmental Concerns Concerns

Environmental Issues from 1960s

Asian Productivity Organization, Tokyo

Origin of the concept of Limits of Growth

The Population Bomb Theory by Ehrlich & Ehrlich

United Nations Conferences on Environment, Population, Human Settlements

1.2 1.2 Global Global Environmental Environmental Concerns Concerns

The Global 2000 Report 1980

WCEDs Report Our Common Future

Earth Summit at Rio and the Agenda 21

International Factor 10 Club

1.2 1.2 Global Global Environmental Environmental Concerns Concerns

Global Environmental Issues

2.5 2.0 1980 19 1300 100 1.6 1950

3.8 9.0 2450 58 2600 85 4.9 1.4 1972

5.8 25.0 2770 91 4200 70 7.0 3.0 1997

Fisheries ( Water Use (

CO 2 emissions ( Ozone Layer (

World Resource Institute http://www.wri.org

CFCs in parts per billion)

1.2 1.2 Global Global Environmental Environmental Concerns Concerns

Pollution Environmental Degradation Resource Depletion Biodiversity

Asian Productivity Organization, Tokyo

1.2 1.2 Global Global Environmental Environmental Concerns Concerns

Regional Scenario - Pollution

Asian Productivity Organization, Tokyo

1.2 1.2 Global Global Environmental Environmental Concerns Concerns

Asian Productivity Organization, Tokyo

1.2 1.2 Global Global Environmental Environmental Concerns Concerns

Regional Scenario - Environmental Degradation

South-East Asia has the highest absolute deforestation rates.

Source: Global Assessment of Human Induced Soil Degradation

Asian Productivity Organization, Tokyo

1.2 1.2 Global Global Environmental Environmental Concerns Concerns

Regional Scenario - Resource Depletion

Asian Productivity Organization, Tokyo

1.2 1.2 Global Global Environmental Environmental Concerns Concerns

Asian Productivity Organization, Tokyo

1.2 1.2 Global Global Environmental Environmental Concerns Concerns

Regional Scenario - Biodiversity

Asian Productivity Organization, Tokyo

1.2 1.2 Global Global Environmental Environmental Concerns Concerns

Cost of Environmental Damage